Oil Prices Decline as US and Iran Report Progress in Swiss Peace Talks

Oil prices fell Monday after Vice President JD Vance said the U.S. and Iran had made progress during peace talks in Switzerland. Brent crude futures, the international benchmark, fell 2.4% to $78.64 per barrel by 9:14 a.m. ET. West Texas Intermediate futures were down 1.44% to $75.50 per barrel. "Yes, there was a little bit of threatening, there was a little bit of whining, but at the end of the day, the talks continued, and we made great progress," Vance told reporters. Mediators Qatar and Pakistan said U.S. and Iranian officials had agreed on a roadmap aimed at reaching a final deal within 60 days. The mediators said the U.S. and Iran would continue technical negotiations throughout the week and establish a high-level committee to oversee the mediation process. The development comes after U.S. President Donald Trump threatened renewed military action against Iran, raising concerns about the durability of a fragile interim peace agreement reached last week. Trump made the statement on Sunday as Vance met with Iranian officials in Switzerland. The meeting was overshadowed by Tehran's announcement that it had once again closed the Strait of Hormuz, a key route for global oil shipments. The discussions at the Swiss resort of Bürgenstock marked the first negotiations since Washington and Tehran signed a memorandum of understanding last week to end their conflict and extend a shaky ceasefire for at least 60 days. The accord called for the reopening of the Strait of Hormuz and a halt to hostilities across the region, including in Lebanon. Iran, however, accused Washington of failing to ensure a ceasefire there and said the latest talks would focus only on implementing the memorandum rather than broader issues such as its nuclear program. According to Quantum Strategy's David Roche, Middle East oil supply is currently close to prewar levels once crude held in storage and aboard tankers is included. However, he warned in a report on Monday that the apparent abundance reflects inventory liquidation rather than a recovery in production, leaving the market vulnerable once those stockpiles are depleted. While oil prices rallied on renewed tensions in the Middle East, Goldman Sachs noted that sustained supply shocks could ultimately accelerate the shift toward electric vehicles, eroding long-term crude demand and adding to downside risks for oil prices.